Multiple Factors Squeeze Guangdong Footwear Exports Plunge

According to the latest data, the export volume of shoe products in Guangdong dropped by nearly 30% in the first two months of this year.

This shows that with the deterioration of the foreign trade environment, the export oriented Pearl River Delta footwear industry is facing unprecedented challenges.

According to the latest statistics of Guangzhou customs, 490 million pairs of shoes exported from Guangdong in 1~2 this year, down 27.5% from the same period last year (the same below), with a value of 1 billion 590 million US dollars, down 0.6%.

Among them, 190 million pairs of shoes exported by private enterprises in Guangdong decreased by 41.1%, and 190 million pairs of shoes exported by foreign invested enterprises decreased by 8.9%.

The total exports of the two accounted for 77.6% of the total export volume of Guangdong's shoes in the same period.

Multiple factors extrusion export Guangzhou Customs responsible person analysis, this year 1~2 month Guangdong shoes export decline is mainly affected by the export tax rebate rate adjustment, the Pearl River Delta region footwear export enterprises significantly reduced, the United States subprime mortgage crisis and foreign anti-dumping trade barriers and other four factors superimposed influence.

The United States is the largest market for shoes exports in Guangdong.

The official said that since the outbreak of the subprime mortgage crisis in March last year, the US consumer index has slipped and Guangdong shoe companies have suffered a corresponding slowdown in US exports.

In 2007, Guangdong export shoes to the United States 1 billion 80 million pairs, a small decrease of 3.4%; 1~2 month of this year Guangdong's export shoes to the United States continued to decline, 190 million pairs of export shoes to the United States, down 12%.

Leather shoes exported to the EU are subject to anti-dumping duties.

In 2007, Guangdong exported 77 million 770 thousand pairs of leather shoes to the EU, which dropped by 6.5%. In the month of 1~2 this year, Guangdong exported leather shoes to the EU, and exported 13 million 300 thousand pairs, down 17.5%.

At the same time, Pakistan, Peru, Venezuela, Canada and other countries have also taken anti-dumping measures on China's footwear products.

With the introduction of the new labor contract law, the aggravation of tax burden on foreign-funded enterprises and the constantly strengthened RMB exchange rate, the labour intensive enterprises in the Pearl River Delta region have gradually been trapped in soaring costs and increasingly strict supervision, and the profit margins have been seriously squeezed, and the footwear export enterprises in the Pearl River Delta region have also decreased significantly.

According to the latest statistics from Guangzhou customs, there are 1512 enterprises in the Pearl River Delta region participating in export shoes this year, a decrease of 1855 over last year's 1~2 months.

Among them, the number of private enterprises decreased by 1484 compared with the same period last year, the number of foreign-invested enterprises decreased by 92, and the number of state-owned enterprises decreased by 23.

According to statistics from the Asian Footwear Association, since last year, more than 1000 shoe factories and supporting enterprises in Dongguan, Huizhou and other places in Guangdong have been closed down by various factors or have been closed down by the courts, or have been moved to other areas.

Li Peng, Secretary General of the Asian footwear industry association, told reporters that orders for state buyers gradually shifted from the Pearl River Delta to Vietnam, Kampuchea, Indonesia and India and other Asian countries. There were also some Pearl River Delta shoemaking enterprises to set up factories in these countries. However, there is no large-scale relocation at present. The improvement of shoemaking industry in Asian countries needs at least 2~3 years.

"Since the beginning of this year, the export volume of footwear products in Guangdong has declined, mainly due to the fact that some low-priced shoes are unable to place orders, and buyers and manufacturers are in a stalemate in terms of price.

On the one hand, many factories are afraid that they will not be able to take orders at low prices because of the sharp rise in costs. On the other hand, buyers are unable to find suitable processing plants in China because they are unwilling to raise prices substantially.

Some traders have pferred some of the low price orders to the neighboring Asian countries such as Vietnam, but the feedback is not ideal. These countries are not yet able to guarantee the delivery time and quality because the shoe industry is not yet perfect, and it is impossible for them to undertake a large number of orders. "

Li Peng said, "the way to break the current stalemate is to raise the price of the PRD enterprises by increasing the added value of products. In this process, there will be pains, and some low value-added enterprises will be eliminated because they can not raise the price."

Wu Zhenchang, chairman of Guangzhou Panyu Chuangxin shoes industry Co., Ltd., said that with the influence of multiple factors, the profits of shoes enterprises are getting thinner and thinner. Now the price of some shoe products is gradually raised to ease the pressure of operation.

As a result of processing for Nike and other brands, profits are relatively maintained at a certain level.

At present, the company has not moved the production line to other countries or regions, but it has not been ruled out that some production lines may be pferred to India or Vietnam.

In the first two months of this year, the average price of exported shoes in Guangdong was 3.2 US dollars / double, up 37%.

Li Peng believes that the increase in export prices is not as big as the increase in costs, and that the major enterprises that are powerful can raise prices, and the bargaining power of many small and medium enterprises (stock quotes) is still very weak.

The government should introduce some policies to support the smooth pformation and upgrading of footwear enterprises, and prevent the shoe industry from shrinking rapidly due to the large-scale relocation of the footwear industry similar to that in China's Taiwan and South Korea.